Question 1

How is HRA exemption calculated?

Accepted Answer

Your exempt HRA under Section 10(13A) is the LEAST of three amounts: (1) the actual HRA you receive, (2) 50% of your basic salary if you live in a metro city or 40% if non-metro, and (3) the rent you pay minus 10% of your basic salary. Whatever is smallest is exempt from tax; the rest of your HRA is taxable.

Question 2

Which cities count as metro for HRA?

Accepted Answer

For HRA purposes, only Delhi, Mumbai, Kolkata and Chennai are treated as metro cities, where the exemption limit is 50% of basic salary. All other cities — including Bengaluru, Hyderabad and Pune — are non-metro, with a 40% limit. Use the metro toggle above to switch.

Question 3

Can I claim HRA exemption in the new tax regime?

Accepted Answer

No. HRA exemption is only available under the old tax regime. If you opt for the new regime you cannot claim it, which is one of the trade-offs to weigh — compare your total tax under both using our New vs Old Tax Regime calculator.

Question 4

Can I claim HRA if I live with my parents?

Accepted Answer

Yes, if you genuinely pay rent to your parents who own the home, you can claim HRA — but you need a rent agreement and proof of payment (ideally bank transfers), and your parents must declare that rent as income. Rent paid to a spouse is generally not accepted.

Question 5

Do I need rent receipts to claim HRA?

Accepted Answer

Yes. Employers require rent receipts, and if your annual rent exceeds ₹1 lakh you must also provide your landlord's PAN. Keep receipts and payment records in case the tax department asks for proof.

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